internal and external sources of finance
Internal sources of finance
Personal funds: Sole tradersmaximize their control over the business. It is a preferred source of finance.
Retained profit: It is cheap because it does not incur interest charges.
Sale of assets: Selling assets is that it is good way of raising cash.
External sources of finance
Share capital: Entitled to dividends when profits are made.
Loan capital: It is accessible and can be arranged quickly for a firm's specific purpose.
Overdrafts: It provides an opportunity for firms to spend more than they have in their acount.
Trade credit: Delaying payments to suppliers, business are left in a better cash-flow position.
Grants: Improve the welfare of people living in an area, Not have to be paid.
Increase business deman by charging lower prices for their products.
Debt factoring: Get immediate cash to fund other activities or projects
Leasing: Not need to have a high capital to purchase assets.
Venture capital: Provide funding that other financiers might regard as too high a risky.
Business angels: Give more favourable financial terms than other institutions or lenders
